Cyprus government approves 70 million euro support package for cost of living

On September 30, 2026, the Cypriot government approved a 70 million euro relief package aimed at reducing costs for electricity, food, and heating. Including existing measures, the total state aid for citizens and businesses reaches nearly 160 million euros. The package includes a one-time 200 euro payment for over 53,000 residents and targeted subsidies for electricity costs covering 23,300 vulnerable families and approximately 82,500 businesses.

From November 1, 2026, to April 30, 2027, the excise tax on heating fuel will be reduced to 2.1 cents per liter, the minimum allowed under EU rules. Finance Minister Makis Keravnos has formally requested permission from the European Commission to lower this rate further. Additionally, the zero VAT policy will be expanded starting October 12, 2026, to include meat, fish, poultry, bread, dairy, coffee, sugar, and baby food until May 31, 2027. Essential items like fresh produce, diapers, and hygiene products will maintain a zero VAT rate throughout 2027.

This initiative follows previous governmental efforts to mitigate inflation and energy price hikes. Beyond these measures, the authorities are also offering incentives for the installation of home photovoltaic systems. Further actions regarding tax negotiations with the European Commission remain pending.